Aligning Strategy and Performance

Practice ManagementFollowing a retreat or planning meeting, most CPA firms develop comprehensive goals and objectives and a strategic direction. However, to be a more integrated and cohesive organization, firms need to effectively align the performance and skills of their partners and staff to the goals and objectives of their firm. This alignment process can be accomplished by setting and closely aligning individual partner and staff performance criteria to the firm’s overall short and long-term strategic intent. This sounds easy, yet performance alignment is extremely challenging and crucial to a firm’s future success and becoming a one-firm firm. Once the partners and staff understand how they can make a direct contribution to build value in the firm, then they will begin to focus their efforts in a more synchronized fashion to work smarter and become more engaged in the process. Strategically aligned firms typically have more positive cultures, are great places to work, and retain their best people. Partners and staff become more energized since they understand that their contributions support the firm’s strategy and are factors in the firm’s succession planning and future success.  Implementing and maintaining an aligned CPA firm culture requires clarity and proper communications about the overall firm direction. This holds true in all size firms. The next step in the process is to mandate that partners and staff develop personal performance objectives aligning themselves with the firm wide strategies. Those firms where partners appear to have separate practices within one firm or have partners who are only concerned with their departments or niches, very rarely attain strategic alignment.

Aligned firms usually manage partner and staff performance throughout the year. Some of the areas that should be addressed and aligned with the goals and objectives of the firm are:

  • Technical skills and expertise
  • Practice development and marketing
  • Niche and/or industry specialization
  • Client engagement profitability and management
  • Career development for partners and staff
  • Client relationships and retention
  • Creating contemporary advisory services and innovative solutions to resolve clients’ problems and issues
  • Succession planning
  • Recruiting and retaining talented partners and staff
  • Mergers and acquisitions of smaller firms
  • Maximizing the use of state-of-the-art technology and software
  • Leadership and management

Successful firms have clearly defined and communicated goals and objectives that bind their partners and staff through an aligned strategic direction. Additionally, adherence and achievement of individual goals is firmly rooted and rewarded in their compensation structure, thus establishing a true strategically aligned performance-based culture.